b'CREDIT CARDS AUTO LOANSCONSUMER FINANCIAL &TELEPHONE CONSUMER PROTECTION BUREAU PROTECTION ACTFor more information, please visit www.lenderlawwatch.com or www.enforcementwatch.comDebt Collect by YearDEBT COLLECTION ACTIONS BY YEAR (WITH RECOVERIES)MORTGAGESTUDENT LENDINGDebt Collection + Debt SettlementDEBT COLLECTION During 2019, Goodwin tracked 14 federal and state enforcement actions related to debt collection and2016 2017 2018 2019debt settlement services. The number represents a significant decline from 2018, during which Goodwin$407.9M$264.4M $250.6M $129.5Mtracked 30 actions, but is consistent with the pattern of declining enforcement actions in this space since5146 30142016.FEDERAL COURTS OFDATA SECURITYLike last year, the CFPB used both the FDCPA and the CFPAs UDAAP provision to target debt collection APPEALSPAYDAY LENDING and settlement companies that allegedly made baseless representations about their ability to help consumers; misrepresented to consumers that employees were attorneys when they were not; made false threats of arrest; represented that certain services were available through affiliates when they were not; and guaranteed that consumers would obtain advertised results when they did not. Notably, the2019 HIGHLIGHTS The expansions also include new proposed require-CFPB also issued a Notice of Proposed Rule Making to implement the FDCPA, setting clear and bright- CFPB Issues Proposed FDCPA Rulemaking. In May,ments and prohibitions. New opt-out options for emails line limits on the number of calls debt collectors may place to reach consumers on a weekly basis, andthe CFPB released its much-anticipated notice ofand text messages are included in the proposed requirements of what must be provided to a consumer, clarify[ing] how debt collectors may communicate lawfully using new technologies, such as voicemails,proposed rulemaking to implement the FDCPA. Theincluding providing the consumer with the option to emails and text messages. stated purpose for the proposed rules, which wouldallow the debt collector to only communicate with them be placed in the existing Regulation F, is to set clear,through a specific email address or telephone number. All told, federal and state agencies secured over $129.5 million in civil money penalties, restitution, andbright-line limits on the number of calls debt collectorsMost notable are the new proposed prohibitions for consumer relief as a result of settlements and court judgments (this figure does not include suspendedmay place to reach consumers on a weekly basis, andthe way a debt collector communicates with a debtor. judgments). This represents a significant decrease from 2018 ($250 million). clarify how collectors may communicate lawfully usingUnder the proposed regulations, debt collectors would newer technologies, such as voicemails, emails andbe prohibited from placing telephone calls to a debtor text messages, among other things. The Notice pro- within seven days of having a telephone conversation KEY TRENDS or practices (UDAP) in violation of Section 5 of the FTCposes several term expansions, which would allow debtwith a debtor, or more than seven times within a seven The CFPB brought more actions related to debt col- Act, or the analogous UDAAP prohibition in the CFPA.collectors to expand their communications with debt- day period. Further, debt collectors would be prohibited lection and debt settlement services than any otherThis year, however, Goodwin also tracked several en- ors. One notable term expansion is redefining the termfrom contacting debtors through social media, with the federal or state agency in 2019, and appears set toforcement actions under the TSRa statute not impli- consumer to include a deceased natural person whoexception of direct messaging, and would be prohibit-continue this trend following its May issuance of its No- cated in this space last year.is obligated or allegedly obligated to pay debt, therebyed from contacting a debtor through an email address tice of Proposed Rule Making to implement the FDCPA.State attorneys general from Massachusetts, Colorado,also expanding the allowable communications a debtprovided by the debtors employer. The proposed regu-The 6 CFPB-initiated actions tracked in 2019 representNew York, California, Minnesota, Delaware, and Northcollector may have with a debtors successor-in-interestlations would also prohibit a debt collector from threat-a marginal increase from the 5 actions tracked in 2018,Carolina, all also initiated or resolved enforcementor the personal representative of the debtors estate.ening to sue, or suing, a debtor for a time-barred debt. during which the CFPB was the second most prominentactions this year. State attorneys general and agenciesAnother expansion is the creation of the new term,However, a debt collector could continue to collect a federal actor. Reversing course from 2018, when themost frequently invoked state consumer protectionlimited content message, which would allow debttime-barred debt using other allowable means.FTC was the most dominant actor in this space withstatutes, as well as CFPA UDAAP provisions (whencollectors to leave voice mails to consumers (contain- The CFPB is expected to issue its final rule in early 16 actions, in 2019 Goodwin tracked only 5 FTC ac- actions were brought in concert with the CFPB) whening a limited set of identified information, and nothing2020 following notice and comment, which closed in tions. Like last year, the FTC and CFPB-initiated actionsthe action concerned debt collectors and settlementelse) that would be deemed not to be a communica- August 2019.typically alleged violations of unfair or deceptive actscompanies. tion under the FDCPA. This limited content message would permit a debt collector to leave a message for aGrowth of Circuit Split on Collection of Time-Barred person other than the debtor without communicating.Debt. In April, the Eleventh Circuit issued its decision The proposed rules would also allow debt collectors toin Holzman v. Malcom S. Gerald & Associates, Inc., et provide FDCPA disclosures through electronic means,al. The issue there was whether a plaintiff plausibly provided such disclosures are in a form that the con- alleged a violation of the FDCPAs prohibition on the sumer may keep and access later. use of false, deceptive, or misleading representation[s] 20 21'